A WORD OF CAUTION PURCHASING VEHICLE UNDER CARS CLUNKER PROGRAM

My number one question for the past few weeks have been the cash for clunker rebate program offered by the federal government to car dealers in order to boost the economy.
Question: how does the program work?
Answer: Customers that trade in their old, fuel inefficient vehicles could get a rebate of $3500 or $4500 off their new purchase. To date $3 billion dollars has been allocated by the government to foster this program.
The timing could not have been better to purchase a new vehicle, with industry sales at over 25 years low; there are some good deals available. This is a buyer’s market all the fruits are ripe and ready for the picking however you have to commit, don’t hesitate as the adage goes you snooze you lose.
Even though the deals are great, inventory are dropping fast and you may not be able to get your vehicle with all the options you want, it is first come first serve.
The manufacturers were caught off guard of the new demand for vehicles, all the manufacturers had slow down their production for months because of slow sales, and since the surge began, they have been scrambling to produce more vehicles as fast as possible to meet demands.
While the incentive programs are excellent with some manufacturers offering additional discount on top of the government $3500 to $4500 a word of caution, still exist.
Some dealers are taking advantage of the consumers by not applying the discount properly. A perfect example published in today’s paper the Atlanta Journal Constitution where a dealer advertise the incentive but only apply a partial amount and pocketing as much as $2000
Another area to investigate is whether they apply the factory incentive as well. $3500 or $4500 government rebate, should be subtract from the purchase price plus any additional factory rebate, some dealers are not giving you both, which is wrong.
Please be on high alert, you must scrutinize your contract and document before signing, there are tricks in the equation and if you are not careful you could end up losing a lot of money. You may want to contact us to review you documents before closing the deal; it is what ACS8 does protect you the consumers not the dealers.
Go ahead and make that new vehicle purchase, prices will never be this good in a long time.

Car Allowance Rebate System Quandary

Breaking new, the cash for guzzlers program has the potential of coming to a screeching halt after only six days in progress. The media are having a field day with this latest news.
On Thursday, reports from the National Automotive Dealers Association spokesperson Mr. Bailey Wood stated that they were notified by the Transportation Department officials regarding plans to halt the program in less than a week of its existence.
According to a survey taken by NADA of 2,000 dealers found evidence of a backlog of almost 200,000 claims that remain to be filed, and if all claims are paid out it will surpass the allocated budget of $1 billion dollars.
There is good to this dilemma or debacle depends on whom you ask, the program is still in the works contrary to previously report, however no one knows for how long.
Today the government said they would continue the program and honor all sales, until they come up with a new plan. Currently congressional officials and industry personnel are in a meeting exploring options toward a viable solution.
The smart thing for the government to do is to make the necessary funds available to sustain the program to the end date rather than by funds. It has already proven successful and is a sure way to keep on boosting our economy.
Other stimulus programs have not been so effective; it is only fitting that the CARS program be given precedence over non-functional ones.
Did the program reach its objective?
Absolutely, but because of manipulation of the process things got out of control very fast. My prediction posted on a previous blog was confirm, but for many other analyst and critics they were caught off guard and are now shuffling for an answer.
How did the money run out so fast?
Dealers were pre selling vehicle and holding them until the release date of the rules and regulations, some dealers reported that they had over 40 vehicles presold before the program officially launched. Based on the number of dealers that qualify the average dealer would have sell about 13 vehicles. Now some dealers are reporting to have sold up to 60 vehicles.
At the ringing of the bell on day one so many claims were submitted within the first hour that the system got over loaded, the frenzy is comparable of trying to purchase a ticket to the World Series.
If dealers had started to sell vehicle on day one of this program rather than the reported presale the turnout would have been different, less congested and ran more smoothly. Not to say dealers should not have presold vehicles, but do not make a fuss of the outcome.
Another sticky point is, not all dealers may be compensated if they did not follow guidelines correctly and could end up losing more than the shirt on their backs.
The bottom line is $1 billion was allocated, over $1 billion was spent hence the objective has been met.

Cash for Guzzlers Details

Finally, the day has come for full disclosure of the rules and regulation governing the cash for guzzlers incentive
The government has been slow with their implementation of the program to help jumpstart the auto industry and economy. Dealers and customers have been on edge since the program has been announced.
Customers that trade in their old, fuel inefficient vehicles could get a rebate of between $3500 to $4500 off their new purchase. $1 billion dollars has been allocated for an estimated 250,000 new vehicle trade-ins by November 1 2009.
With an estimated 19000 dealerships and 250000 vehicles, this amount to an average of 13 vehicles per dealers in a 3 months span. Although this program was put forth to boost the economy, it could be over sooner that predicted.
Many dealers have been selling and signing up customers for the program in advance prior to the release of the government rules release today July 24.
Already there have been complaints from some dealers that they are unable to log into the system because of constant crashing of the website, others about the length of the document. One could only understand the frustration of waiting so long to get the details, and trying to be first to take advantage of this program because the money will run out quickly.
For consumers that may not qualify for this incentive Chrysler have come up with a new program offering any customers up to $4500 off a new purchase on selective models regardless if they qualify for the cash for clunkers or not. Their program last until July 31.
As per their program if you qualify for cash for guzzlers they would double the offer meaning you could now get up to $9000 of a new purchase.
Emerging out of bankruptcy in less than 2 months is it the right thing for Chrysler, only time will tell.
Down load the rules to CASH FOR GUZZLERS http://www.cars.gov/files/TheRule.pdf

GM Insight out of Bankruptcy

LEANER letting go of the stagnated overpaid white-collar workers that steered GM into the ravine
MEANER cutting dealerships and their commission regardless of their appeal
These two definition best describe GM new stance,
Henderson said the real focus now is customers, cars, and culture. What the heck was it before, did they not intend to have customers why were you building cars in the first place.
What GM needs to do is listen to the people
How about putting out a national poll good or bad asking the American people what they want in a car and what models they would like to see remain, then take your marketing campaign from their perspective.
However, no company wants to hear the bad news, which oftentimes is the truth, we all forget about constructive criticism, and how important this could be for future development of a product or system.
Take your head out of the sand GM, wake up and listen to the American people, your idea is usually one person to a few making these irrational decisions. The consumers are the many, the majority and their opinion matters.
If GM intent is not to focus on the people and their needs, then cease immediately and do not string us along.

Saving Terminated Dealership, the House Committee Vote

Finally, the bullies of GM are sweating; the little guys have banded together and  build up courage, hope and a kickass attitude to fight back even harder via the courts. Round one is still in motion,
Chrysler dealers might have sustained the major blow, but as for GM, dealers there remain a fighting chance.
If reinstatement of the dealers is achieved thru the courts, how do you assess the loss and value, look at the implication and the repercussion involve. Then comes the compensation what is considered fair.
What GM and Chrysler did to its dealers in my opinion is unjust; it is just a way to steamroll dealership by filing for bankruptcy. They could have file for bankruptcy and retain those dealers.
Now I would agree that there are some failing dealerships but there must be another way to resolve this issue, on the flipside how about those dealers whose numbers were average or better, or the dealers who just spent millions of dollars to upgrade their facility and not being giving the chance to recoup some of their expense.
It is situation like this that renegades are born, the holy challenge their belief and the trustworthy becomes the un-trusted,
GM and Chrysler gave their dealers not only a raw deal but to inflict such a deathblow with open wounds and then pour salt and pepper in it is just plain wicked.
I hope between the courts and House Committee a resolution is reached favorable to the dealers.

1Q09 GM sales slump – Ford and Toyota make gains – Ever Wonder Why?

First quarter auto sales data shows that while GM sales continued to slump, Ford and Toyota made significant gains. Keep in mind that Ford accepted NO bailout moneys and Toyota is Japanese owned. Could it be that American car buyers are steering clear based on principled, ethical reasons – not supporting a company asking for a hand out? Or could it be concern of more practically matters, such as future availability of parts and dealership for repairs, or issues of warranties?

And what happens with GM and Chrysler? There is much talk of them being “smaller, leaner” companies. But could such significantly smaller companies continue to complete with a much larger Ford and Toyota who are already picking over the bones of these all but busted companies? Only time will tell for sure, but remember – American’s love an underdog, not a loser.

Fiat Fiasco

As part of the automotive bailout package, the United States government gave both Chrysler and General Motors an ultimatum: Come up with significant cost savings and restructuring plans to prevent or delay falling into bankruptcy. Chrysler was given an additional 30 days to comply – GM was given 60. It seems this disparity may be the death knell for Chrysler, but time will tell.

Prior to this governmental ultimatum, Chrysler had been in talks with Fiat about a possible merger. Those talks had broken down. But, in light of the 30-day deadline, Chrysler seemed to enter panic mode and restarted those merger talks. Within hours after President Obama made his announcement, Fiat CEO Sergio Marchionne flew to the US to participate in the negotiations with Chrysler. It seems again that these talks have become mired because Mr. Marchionne and the unions have reached a virtual impasse over contract re negotiations. Chrysler corporate officials have also looked askance at the bigger share of Chrysler that Mr. Marchionne as now asking for. While both sides are playing hardball with each other, time is running out for Chrysler to secure a deal and present its plan to the government.

Chrysler needs this merger to survive. If Chrysler should fail, the union and the workers lose. Without it, Chrysler will most likely end up in bankruptcy. Perhaps though, once Chrysler has reorganized within its bankruptcy filing, it will emerge as a new, leaner company, without all the excess baggage they are currently fighting to keep.

Welcome

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My name is Brenton and I am starting this blog for the same reason I started my company ACS8 –to apply my automotive background to help people save money and feel more comfortable about managing their automobiles.

If you need a second opinion on a mechanic’s bill, need to manage a fleet of cars for your business, or just have general automotive questions—send me an email.

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